On April 6, President Bush presented the 2000 Malcolm Baldrige National Quality Award to four companies in a ceremony held in Alexandria, Virginia. Among those companies
was Operations Management International Inc., which operates more than 170 wastewater and drinking water treatment facilities. With headquarters in Greenwood Village, Colorado, OMI was formed in
1980 as part of the CH2M HILL family of employee-owned companies. What follows is an interview with Roger B. Quayle, OMI's vice president of quality and technology. Look for
our interviews with representatives from the other winners in the next three issues. Quayle has 15 years of experience in planning, developing and implementing strategic
quality improvement processes, measures, statistical analysis processes, and standards and training. He manages OMI's "Obsessed with Quality" process, which focuses on empowering
employees to develop new approaches to enhance how they perform their jobs.
Quality Successes
- Average annual revenue per associate improved from $92,600 in 1997 to almost $108,000 in 2000--an increase of more than 15 percent.
- Market share in its core business segment has increased to 60 percent, up from 50 percent in 1996. Over this time span, total revenue grew at an average rate of 15
percent, compared to 4.5 percent for OMI's top competitor.
- Associate turnover decreased from 25.5 percent in 1994 to 15.5 percent in 1999, better than both the national average of 18.6 percent and the service industry's
average of 27.1 percent.
- For all six components of customer satisfaction, scores show an eight-year improvement trend, all rising above five on a seven-point scale for which one means
"very poor" and seven means "excellent."
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QD: Why did your company apply for the Baldrige?Quayle: About 10 years ago, our company began to grow very fast; in fact, it's still growing fast.
We were concerned about preserving our company culture as we grew. So we made a decision to start a formal quality process to help us preserve our company culture, and we chose
the Baldrige criteria as the structure for our quality process. We formed seven teams around the seven Baldrige criteria categories and used them to
launch our quality process. It really helped us keep the quality of service and all of the good things that we had going with employees in a period of very rapid growth. QD: What was the biggest challenge you faced when you actually started implementing the quality processes to go for the award? Quayle:
One of the biggest challenges was simply communicating expectations and changing our culture from an autocratic culture to a team culture. We did a really good job of changing that
culture. A second challenge came in the mid-1990s, when we had implemented a lot of quality processes and systems, but they weren't well linked or aligned. The Baldrige criteria require
a leadership system to link together all the different initiatives. So, we implemented--with the help of a consultant--a Deming-based leadership
system that tied together all of our initiatives. It wasn't so much a barrier as a step that we had to take as our process matured. And taking that step made a huge difference
for us. The feedback from the Baldrige examiners told us that we had a lot of great things but that they were operating independently. For example, we did customer
surveys, which one team would evaluate and use to create action plans. We conducted employee surveys, which another team did. And yet another team managed suppliers
and looked at supplier feedback. We now have a system that links together what we call a family of measures. QD:
Earlier you said one of your biggest challenges was communication. How did you improve that, and how do you communicate the importance of quality? Quayle:
We build the importance of quality into everything that we do. It's not something separate or extra. We communicate that all the time in many different ways.
For example, we provide eight hours of training in quality for every employee every year. Half of the articles in our in-house newsletter are about teams, improvement
initiatives, and rewards and recognition. We also talk about quality during meetings, such as project management meetings and regional meetings. In addition, all of our
leaders go through a four-day planning meeting to look at all of the inputs from all of our different systems. As a result of that meeting, we update our strategy and come up
with improvement initiatives. And we communicate that to people. We call it quality, but it's really become part of how we run the company. QD:
How do OMI's leaders show their commitment to quality? Quayle: We try to just lead by example. We don't try to publicize it so much as just
do it. This planning meeting I just talked about is probably one of the best examples. And when our leaders are out talking to people, they talk about what we're doing and
how we're using the corporate family measures. We have 24 corporate initiatives right now, and each is sponsored by one of our seven vice presidents. QD:
Your company has about 1,400 employees spread out around the country. Has that presented any challenges? Quayle:
Big challenges. That's one of the reasons why we started the quality process. We have 170 locations. Some of them have as few as two people, and some of them
have as many as 100. A big part of our success--and I realize this may sound trite--is empowering people. We have to provide systems and training and ways for those
people to communicate so that they can be in touch. We can't be there and watch them all the time. When the Baldrige examiners did their site visit, they came to our
headquarters for a day, went to our projects for two days, and then came back to headquarters. They visited 30 of our locations and had employees from 30 other
nearby projects drive in to participate in the interviews. And I believe that's why we won the Baldrige Award: They could see how our projects worked and how our
people implemented the systems that we had talked about. QD: How did you come up with your "Obsessed with Quality" process? Quayle: Our president, Don Evans, had a vision: He wanted an organization that has amazing customer service and an environment in which people couldn't wait to come
to work every day. I believe we've done that. We want everything we do to be linked to quality and be tied to quality--and not just something that we do but that we're really
almost fanatical about. QD: How do you measure the success of the quality initiative? Quayle:
We have a family of measures that measure not just the financial success of the company but also the operational success, such as people measures, permit
compliance and the like. We track about 24 measures, which our executive team reviews quarterly to look for trends. When we go through our annual planning
process, we look at which initiatives we should we be working on. During the annual planning meeting, we make predictions on improving these measures and what the
effect will be. And then a year later when we go through the next planning process, we review our predictions to see how well we did. QD:
Have you been able to quantify a return on investment for your quality efforts? Quayle: In certain areas, we can very clearly say that we've saved hundreds or
thousands of dollars. However, we haven't tried to quantify the whole thing; it's so subjective in a lot of ways. But there's no doubt in our minds that we're getting huge
return on our investment, even though we don't know exactly what it is. QD: So what's next? Quayle:
Our goal in 2000 was to earn a site visit; it wasn't to win. In some ways, I wish that we just had the site visit because then we'd have that next goal out there.
We've been sending a consistent message to our people that winning the Baldrige Award doesn't mean that we're done; we're always focused on continuous
improvement. We'll work on improving based on the feedback report. We're also in the process of working with Fortune magazine to get on the list of the Most Admired
Companies to Work For. We are also working to help form a quality award for the state of Colorado, which currently doesn't have a state quality award. We're going to
continue to do what we've always done, which is try to deliver amazing customer service and create an environment where people can't wait to get to work every day. About the author Scott M. Paton is Quality Digest's publisher and editor in chief. E-mail him at spaton@qualitydigest.com . |
